Apple and IBM Team Up to Bring Apps, i-Products to the Enterprise

Tech giants Apple Inc. and International Business Machines Corp. today announced a huge partnership that brings together two long-time competitors and ushers Apple, long known for its focus on the end-user, into the enterprise arena.

In the partnership, Apple and IBM engineers plan to develop more than 100 industry-specific business applications specifically for iPhones and iPads that will run on Apple’s iOS platform. IBM will sell Apple products with those built-in apps to its clients across the globe. Apple will also add more services to its AppleCare program to support enterprise customers.

Justin Sullivan/Getty Images

Attendees gather at the Apple Worldwide Developers Conference at the Moscone West center on June 2, 2014 in San Francisco.

The deal underscores Apple’s push to expand the iPhone and iPad’s reach into companies, while IBM looks to move more of its business software onto mobile devices increasingly used by employees, reports the WSJ’s Daisuke Wakabayashi. Companies from Barclays PLC to Procter & Gamble have rolled out iPads for their employees.

For CIOs, the partnership could radically change the way they deploy and use Apple products within their businesses. Corporate technology leaders have said that Apple can do more to make it easier for companies to manage iPhones and iPads, particularly when it comes to management capabilities like the ability to load pre-configured applications and better interoperability with software from the likes of Microsoft Corp. The deal could perhaps make them more comfortable pursuing a mobile-first strategy.

“Apple is not an enterprise company, but that’s not their DNA. It is IBM’s DNA and IBM has had those relationships forever,” Gartner analyst Van Baker told the WSJ. “It’s an unlikely combination but a very strong one if they can pull it off.”

That doesn’t mean Apple isn’t deployed in the corporate world, though. The Journal reported earlier this year that Apple won about 8% of global business and government spending on computers and tablets in 2012, according to Forrester Research Inc., up from 1% in 2009. The numbers excluded the iPhone, which may be the most widely purchased Apple product by corporate customers.

The deal could also be a blow to competitors like Blackberry Ltd. and Microsoft Corp., who focus heavily on selling to enterprises. Earlier this year, Microsoft announced the availability for its flagship Office software for iPad.

Comments (5 of 14)

Steven, this is an interesting combination and a challenging one. I think the motivation for either company is different. For Apple it will benefit from IBM’s stronger supply chain in the corporate world including relationships, production support, distribution channel, and experience. For IBM it will be able to better compete against Android, Microsoft and Oracle by offering mobile products to its corporate clients.
First, it is important to remember that most corporate users have iPhones primarily as an individual choice, not because of corporate standards which is how Blackberry dominated the market in the early 2000’s. Second, most business applications are available on both iOS and Android (e.g. Salesforce One) which creates little differentiation for corporate customers. Third, Android devices are cheaper and its operating system is leading in market share. This will appeal to cost-conscious corporate customers.
Furthermore, the companies are very different culturally and that will be a big challenge to overcome. The creative minds at Apple have not joined the company to see its products shift towards corporate customers. They follow Jobs’ vision to build insanely great products for individual users. Their goal is to impact the lives of millions of people and not necessarily please corporate America. In Jobs words “It’s more fun to be a pirate than join the Navy”. In this analogy, IBM is the Navy. They grew by R&D and acquisition creating strong product suites such as WebSphere which have a leading market share in corporate customers. While IBM has been able to convert its R&D into revenue it has shifted focus towards professional services.
If Apple and IBM can execute well enough to overcome the cultural challenge it will have to overcome its competitors. Can their alliance secure a strong enough position against Android, Microsoft, Oracle, and even Blackberry? Can IBM strengthen its brand recognition by working with Apple? Shouldn’t it have partnered with Blackberry instead?
Last, the idea around such alliances is great but execution will matter more. How will they share revenue? How much investment will it require? Will IBM be able to distribute Apple products along with its own offerings? Since it is an alliance and not a joint venture nor acquisition this partnership may not directly impact the valuation of either company in the short term. Will this investment of time, money, and resources have a better return than other strategic initiatives?

11:49 am July 16, 2014

eboy wrote:

Classic round peg in a round hole this time. Unlike the aborted partnership with MS this one has no overlaps in corp strategies. IBM gets access and mods (mostly enterprise security) to the earth's best mobile device and a new software platform for business software it develops (Siri on Watson steroids) where profits are the highest and Apple gets the entree into the enterprise with a large boast in volumes at the premium end. Also look for Apple to use IBM for their Icloud infrastructure which can use a boast in performance.

To the nameless staffer who thought this one up Bravo..........................

6:47 am July 16, 2014

Captain James T Kirk wrote:

Message from the Enterprise:

Bwah ha ha ha ha

6:45 am July 16, 2014

AppleFanBoi wrote:

Is Apple stupid? Jobs knew the enterprise market was disaster...and then they sign on with the Titanic?

6:34 am July 16, 2014

FrankC wrote:

I typed the last two entries from my mother's basement. Once I found Apple, I knew I had my old IBM back. Playskol for adults.

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